Tuesday, March 13, 2018
By NEIL HARTNELL
Tribune Business Editor
A BAHAMIAN accountant yesterday admitted he was “blindsided” by the Minister of Housing’s attack on his firm’s integrity during the mid-year Budget debate.
Philip Galanis, principal of HLB Galanis & Company, told Tribune Business he first wanted to meet with Romauld Ferreira, minister of the environment and housing, before giving a full public response to the criticism levelled against his business.
“I don’t want to blindside him like we were blindsided in Parliament,” the former PLP MP and Senator said. “I would not want wish to comment publicly before I’ve discussed the matter with him.
“I would want to extend to him the courtesy of first discussing the matter with him. I would not wish to broadside or blindside my client without speaking to him first.”
Mr Galanis refused to comment further, but Tribune Business sources suggested he and his accounting firm view Mr Ferreira’s comments as inaccurate and ‘off base’, and feel he may have been misled.
The Minister, leading off his mid-year Budget debate, suggested HLB Galanis & Co “collected whopping” multi-million dollar sums despite doing little to no work in relation to its role as ‘administrator’ of a $10 million National Insurance Board (NIB) loan designed to kick-start the Government’s housing programme. The sums sought, he claimed, exceeded the loan’s value.
Mr Ferreira’s allegations stemmed from a November 8, 2013, agreement that he “uncovered” between the Ministry of the Environment and Housing and HLB Galanis & Co.
The agreement stated that his ministry, NIB and the Ministry of Finance “have come together to collaborate as partners” in a venture where Housing was to take the lead.
Through the deal put together under the former Christie administration, NIB provided a $10 million ‘bridge loan’ to finance the Government’s low-cost housing programme. The funds were to be drawn down over a 12-month period in four separate tranches of $2.5 million each.
“HLB Galanis & Co was hired to manage the drawdown of the funds and protect the interests of the partners,” Mr Ferreira told the House of Assembly. “HLB Galanis & Co was expected to adhere to the scope of works and any other responsibilities given for proper management and delivery of the project.
“At what cost, Mr Speaker? HLB Galanis & Co collected a whopping $10 million and was looking for $2.9 million more. Mr Speaker, what was so astonishing about the project is that the duties prescribed for HLB Galanis were always carried out by public officers.”
Tribune Business reports from 2013 confirm that NIB financing was essential to kick-starting the Government’s housing programme under the Christie administration because the Mortgage Corporation, which has traditionally fulfilled that role, was prevented from doing so by its cash-strapped financial position.
Mr Ferreira, though, described the three-way deal as “noteworthy” because the Minister of Finance (Perry Christie) had failed to sign it. And then-minister of the environment and housing, Kenred Dorsett, signed the document as “a corporation sole” - rather than following the traditional practice of having the permanent secretary, or a senior civil servant sign.
A ‘corporation sole’ is a legal entity consisting of a single incorporated office, occupied by one person, and Mr Ferreira said that of the 73 homes to be constructed from NIB’s $10 million only 55 - around two-thirds - were completed.
“At the commencement of the agreement there were some 18 unfinished houses in Abaco, 15 in San Salvador and 14 houses in the John Claridge Subdivision that were incomplete,” Mr Ferreira told the House of Assembly. “That meant a total of 47 houses needed to be completed. However, these houses never were because they were not made a part of the Memorandum of Understanding (MoU).”
The Minister added that 14 mortgage requests for the Bahamia West Repleat subdivision were never completed by the Bahamas Mortgage Corporation, which only issued 25 mortgages for homes covered by the deal. The end result, Mr Ferreira said, was that only 31 of the 55 completed homes were ultimately occupied.
Meanwhile, just four of the seven bidders who qualified for the New Providence landfill Request for Proposal (RFP) round have paid the $10,000 non-refundable fee and picked up the tender documents.
The four to do so include at least three groups that are either Bahamian-led or have local participation, as they include Bahamas WTP Ltd; Bahamas Waste; Providence Advisors and the Waste Resources Development Group; and APAPA International (Nassau).
Cedric Scott, the actor, producer and uncle of former Cabinet minister, Jerome Fitzgerald, is listed by Bahamas WTP LTD’s website as one of its five principals. Its two other Bahamas-based principals are banker, Ivylyn Cassar, and permanent resident, Fay Russell. The company’s physical address is listed as Ms Cassar’s Equity Bank & Trust, based in western New Providence.
Bahamas WTP is a consortium that also features two US companies, Delaware-incorporated Ameresco Ltd and Louisiana-based Furnace and Tube Services Inc. Bahamas Waste is the BISX-listed company of the same name, while Providence Advisors is headed by the well-known local investment banker, Kenwood Kerr. His partner, Waste Resources Development Group, features all the other Bahamian waste disposal groups bar Bahamas Waste.
Mr Ferreira’s comments indicate that Valoriza Sevicios Medioambientales, a Spanish-headquartered waste and environmental services provider with significant interests in the Latin American region; Eastern Waste Systems, which appears to be a Florida-based garbage disposal operation; and Marine Contractors Inc have elected not to proceed with bids despite qualifying for the RFP round.